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Asia Recap: Cheap Aussie main theme

FXStreet (Bali) - The Australian Dollar was the worst performing currency in Asia, with the rest of G10 FX barely changed from familiar Friday levels.

AUD/USD tested the 0.90 following poor Chinese data over the weekend, with fears of an economic slowdown re-emerging. While some optionality interest managed to buoy the rate just above the crucuial round number, the Chinese data miss is likely to weight on the Aussie unless the big Panda announces further selective easing in coming days/weeks. Also, it is worth reminding traders that the increase in volatility has been attributed as one of the main catalysts for the long-held AUD carry trade positions to finally get unwound by the smart money community.

The rest of G10 currencies, with the Tokyo market closed due to a public holiday, offered very few moves, with the USD initially a touch lower, although managing to recover ground against the British Pound, while the Euro was slightly firmer.

The Chinese figures were shockingly low, with industrial production (YoY) coming at 6.9% in August vs forecasts of 8.8%, urban investment (YTD) (YoY) came in at 16.5%, below expectations (16.9%) in August, while retail sales (YoY) came in at 11.9% below forecasts (12.1%) in August. Nomura Economists are now expecting Q3 growth of 7.2% and one 50bp RRR cut per quarter from Q3 2014 to Q4 2015.

Another focal point moving the Pound in the early stages of Asia were the updated three Scottish independence poll results, which keeps pointing at a narrow advantage by the unionist, although with over 500,00 Scottish voters reportedly still undecided, concerns of a separation are running high.

As reported in an early piece: "The Survation poll, which some may take with a grain of salt as it was commissioned by the Better Together No campaign, showed No 53% vs Yes 46%. However, A survey of 705 Scots by ICM for The Telegraph saw the Yes vote taking an eight-point lead over the No campaign, with the online poll showing 54% planning to vote Yes vs 46% for No. Lastly, the Opinium/Observer poll showed a narrow gap in favour of No, with 53 % vs 47 %."

Main headlines in Asia

China Industrial Production (YoY) below forecasts (8.8%) in August: Actual (6.9%)

China Urban investment (YTD) (YoY) came in at 16.5%, below expectations (16.9%) in August

China Retail Sales (YoY) came in at 11.9% below forecasts (12.1%) in August

Scottish independence polls: 'No' leads by narrow margin

China: Expect 50bp RRR cut/quarter until Q4 2015 - Nomura

United Kingdom Rightmove House Price Index (YoY) increased to 7.9% in September from previous 5.3%

United Kingdom Rightmove House Price Index (MoM) increased to 0.9% in September from previous -2.9%

Australia New Motor Vehicle Sales (YoY) fell from previous -0.4% to -3.5% in September

Australia New Motor Vehicle Sales (MoM) dipped from previous -1.3% to -1.8% in September

Singapore Unemployment rate remains unchanged at 2% in 2Q

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